SC: Once sale is declared bad, seller has to refund the sale consideration.

The Hon’ble Supreme Court, today, i.e. on 28thJanuary 2019, in the matter of Vijay A. Mittal & Ors. v. Kulwant Rai (Dead) Thr. LRs. & Anr.observed that once the sale is declared bad, the transaction of sale fails and, therefore, the seller has no right to retain the sale consideration with himself and has to refund the sale consideration to the buyers

The Hon’ble Supreme Court observed that:

A finding on the issue of readiness and willingness is one of the important and relevant findings in a suit for specific performance of an agreement. It is a finding based on facts and once it is recorded, it becomes a finding of fact. (Para 21)

Unless such finding is found to be against the pleadings or contrary to the evidence or the law governing the issue, it is binding on the High Court and also on the Supreme Court. (Para 22)

It is a trite law that if out of all the legal representatives, majority of them are already on record and they contested the case on merits, it is not necessary to bring other legal representatives on record. The reason is that the estate and the interest of the deceased devolved on the legal representatives is sufficiently represented by those who are already on record.(Para 30)

One cannot dispute the power of a Karta to sell the Joint Hindu Family property. It is, indeed, inherent in him. However, it is subject to certain restrictions, namely, the sale should be for the legal necessity and for the benefit of the family. (Para 44)

The very fact that one son of the Karta is a signatory to the agreement  is sufficient to draw a presumption that the agreement to sell was made by the Karta with the consent of other coparceners. (Para 45)

Once the sale is declared bad, the transaction of sale fails and, therefore, the seller has no right to retain the sale consideration with himself and has to refund the sale consideration to the buyers (Para 49)

Copy of judgement: Judgement_28-Jan-2019

-Tushar Kaushik

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